Top Five Dividend Aristocrats with Significant Upside Potential
To earn the title of a “Dividend Aristocrat,” a company must raise its dividends every year for at least 20 years in a row. These companies draw considerable interest from investors and are often included in funds that track the Dividend Aristocrats Index, resulting in high demand for their shares. This demand can sometimes cause the stocks to be overpriced, limiting potential gains.
However, we’ve identified five dividend growth stocks from the SPDR S&P Dividend ETF, which follows the S&P High Yield Dividend Aristocrats Index. These stocks still show meaningful upside potential according to analyst projections. If analysts’ predictions hold true, these stocks could generate both capital gains and increasing dividend payments over the next year.
The table below shows the recent share prices, average analyst target prices for the next 12 months, and the percentage increase needed to reach these target prices.
| Stock | Recent Price | Avg. Analyst 12-Mo. Target | % Upside to Target |
|---|---|---|---|
| Sonoco Products Co. (Symbol: SON) | $54.24 | $60.60 | 11.73% |
| Kenvue Inc (Symbol: KVUE) | $21.73 | $23.69 | 9.03% |
| Genuine Parts Co. (Symbol: GPC) | $143.16 | $155.75 | 8.79% |
| Abbott Laboratories (Symbol: ABT) | $117.82 | $128.05 | 8.68% |
| General Dynamics Corp (Symbol: GD) | $304.87 | $331.15 | 8.62% |
Analysts’ target prices focus solely on share price. However, each stock is expected to pay dividends during the next year, meaning total returns can be calculated by combining the expected share price gains with the dividend yields. The table below showcases the implied total return potential for these stocks over the next 12 months:
| Stock | Dividend Yield | % Upside to Analyst Target | Implied Total Return Potential |
|---|---|---|---|
| Sonoco Products Co. (Symbol: SON) | 3.83% | 11.73% | 15.56% |
| Kenvue Inc (Symbol: KVUE) | 3.77% | 9.03% | 12.80% |
| Genuine Parts Co. (Symbol: GPC) | 2.79% | 8.79% | 11.58% |
| Abbott Laboratories (Symbol: ABT) | 1.87% | 8.68% | 10.55% |
| General Dynamics Corp (Symbol: GD) | 1.86% | 8.62% | 10.48% |
Furthermore, we analyzed how much the dividends of these stocks have increased over the past year compared to the previous twelve months. This offers insight into the growth rate of dividends, helping investors assess their potential value:
| Stock | Prior TTM Dividend | TTM Dividend | % Growth |
|---|---|---|---|
| Sonoco Products Co. (Symbol: SON) | $2.00 | $2.06 | 3.00% |
| Kenvue Inc (Symbol: KVUE) | $0.20 | $0.805 | NA% |
| Genuine Parts Co. (Symbol: GPC) | $3.745 | $3.95 | 5.47% |
| Abbott Laboratories (Symbol: ABT) | $2.04 | $2.20 | 7.84% |
| General Dynamics Corp (Symbol: GD) | $5.22 | $5.58 | 6.90% |
These five stocks are part of our comprehensive Dividend Aristocrats List. The average analyst target price data used in this analysis was sourced from Zacks Investment Research via Quandl.com.
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Also see:
• PNW Dividend History
• Funds Holding RZLT
• Top Ten Hedge Funds Holding RDWR
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
